Live in Texas, Work Remotely for a New Mexico Employer: Who Taxes You?
Answer
Nothing is owed on either side. Texas has no wage income tax, and New Mexico taxes nonresidents only on work actually performed inside New Mexico. Never setting foot in New Mexico keeps the income entirely outside its reach, so this pair produces no state return at all.
Last verified
An employer's address is not a tax nexus for its employees. Working from Texas keeps the income Texas-source, and since Texas levies no tax on wages, the income lands nowhere at all.
What you file
There is nothing to file in either Texas or New Mexico on these wages. Your federal return is unaffected — the federal government taxes the income whatever the states do.
The two states, side by side
| Texas | New Mexico | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form PIT-1 with Schedule PIT-B |
| Credit for other-state tax | No income tax | Form PIT-1 (credit for taxes paid to another state) |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | Texas Comptroller of Public Accounts | New Mexico Taxation and Revenue Department |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New Mexico and working in Texas gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Texas → New MexicoWork state only
- 1099 contractor: Texas → New MexicoClient state only, if you work there
- Moved mid-year: Texas → New MexicoOne part-year return — the state you moved to
Other Texas pairs
Questions people actually ask
I live in Texas and work remotely for a New Mexico employer. Which state do I pay?
Nothing is owed on either side. Texas has no wage income tax, and New Mexico taxes nonresidents only on work actually performed inside New Mexico. Never setting foot in New Mexico keeps the income entirely outside its reach, so this pair produces no state return at all.
Which state should my employer be withholding for?
Neither. There is no state income tax to withhold on either side of this pairing, so a state line on your pay stub for Texas or New Mexico is an error worth querying.
Does my New Mexico employer's location alone create a New Mexico tax obligation?
No. New Mexico sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside New Mexico are a different matter — those are New Mexico-source income and can require a nonresident return.
How current is this?
The Texas and New Mexico rules on this page were last checked against Texas Comptroller of Public Accounts and New Mexico Taxation and Revenue Department on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Texas Comptroller of Public Accounts — individual income taxaccessed 2026-08-07
- New Mexico Taxation and Revenue Department — individual income taxaccessed 2026-08-07